Costly loan

The "I-Bank" loan proposed by your staff will actually cost the City $8.5 million including the 2.06 percent interest over 30 years when all three phases of the loan are included.

The $6.2 million once earmarked for COSTCO road improvements under the RDA program will end up costing the City approximately $13 million over the 20 year life of these bonds. The State Finance Department forbids the City to use this RDA money for the Costco project. Therefore the $6.2 million will be held in the bank by the City, earning perhaps 0.5 percent interest, until it can be paid off in ten to 20 years. The cost of this will be $12 million.

Added together, the $6 million road infrastructure project will end up costing the taxpayers over $20 million. We are stuck with two loans for the same project ? Double Jeopardy, I would call it. This is a huge price to pay for what amounts to an outright gift to Costco. We would not need the new roads if there were not a Costco project. People are not going hungry or having to dress in rags because we do not have a Costco.

The city sales tax and property tax revenues in 2011 were $5.5 million. How will Ukiah pay back these loans? Before you, the City Council, proceed with the I-Bank loan application, you and the citizens need to see the detailed projection of loan repayments, and RDA bond repayments over time. You need to consider how you can possibly pay back this huge sum ? amounting to more than three times our yearly tax revenues. How are you going to pay? Do we really want a new Big Box Costco this bad?